Factors Affecting Costs of Technology Projects

Costs of Technology Projects

There are many factors that affect costs of technology projects. Whether your organization is looking to create a new system, from scratch, or upgrade an existing system. At Veriday, we have extensive experience working on technology projects, and as a result, have a fundamental understanding of factors that affect the cost of projects of this nature.

1) Scope of Project

The factor with the most impact on the cost of a technology project is the scope of the project itself. A more comprehensive project, with more components and capabilities, will be more expensive to create.

If the project involves creating a solution from scratch, it will be a larger project, and cost more. Sometimes, this is the best course of action. Some systems and technologies are extremely difficult (and therefore, expensive) to upgrade. If a legacy system is built on obsolete, difficult to integrate technology, upgrade costs will rise.

If the project involves integrating existing systems with a new component, costs can vary depending on several factors including:

  1. What technology is the new system built on?
  2. What technology is the legacy system built with?
  3. What level of integration will be required?
  4. What level of technological expertise will be required to integrate the two?

2) Required Personnel

As with any business activity, the highest costs of any technology project will go to human resources. Hiring people with the skills needed to complete complex projects is difficult, and they will need to be well-compensated to attract those individuals to your project.

Technology skills are in high-demand, and highly-skilled technology professionals are very tough to find and recruit to your project team. These individuals are necessary for any project because they have the knowledge and skills to put together the nuts and bolts of your solution.

Sometimes it’s more cost-effective to hire external resources, especially if there is a set-in-stone deadline for the completion of the project. There are companies (such as ours), with the required expertise to complete the technology project that your enterprise is trying to execute.

Trying to save money on personnel often results in higher long-run costs in technology projects because mistakes need to be fixed, unexpected roadblocks appear, and high-level activities need careful delegation.

3) Timelines

Technology projects can take a long time from start to finish. There are many factors that impact the timeline of any project. The project scope is a primary factor when creating timelines, as creating one thousand features will take longer than creating one feature. The complexity of the project will also play a major role when creating a project timeline.

The complexity of the project will impact timelines in three main ways:

  • Investigation

 

Time spent brainstorming, testing and implementing innovative methods of solving complex problems. The more complex a project, the more time will be spent on investigation.

 

  • Planning

 

Complex projects require more comprehensive planning, leading to longer timelines. Increased time spent planning is especially common in projects that require significant amounts of integration between systems built on disparate technology. Even if the task itself is straightforward, planning workflows and processes can be time-consuming.

 

  • Implementation

 

More complex projects require more time to implement correctly. Technology projects need to be tested and reviewed to ensure all components of the project are properly integrated and have full functionality. Projects that require integration with large databases or proprietary systems need to be comprehensive testing, which will add even more time to the length of the project.

4) Testing Requirements

The fourth factor that will impact the costs of a technology project is the testing requirements. There are certain business functions which require an extra degree of testing to ensure the consistency and security of the new technology solution.

Any technology solution that will govern personal information of an organization’s employees or customers or deals with key competitive information needs to be comprehensively tested to ensure the security of the system. Comprehensive testing will add to the cost of the project but can save the organization significant costs in the long-run. The average cost of a data breach is over $3.5 million, which is much, much higher than comprehensive testing would run you.

Other Considerations

Another major factor impacting the cost of technology projects is the costs associated with licensing the required technology. These costs can be prohibitive if a proprietary solution is chosen. Several companies that have proprietary platforms for creating digital experiences and the cost of using those technologies is very high.

To reduce the cost of your technology project, you can use an open-source solution such as Liferay, which has supported versions of their latest platform Liferay DXP, at costs that run much lower than the average, proprietary platform.

There are many reasons why you should use Liferay DXP, one of the leading portal platforms on the market when undergoing your next digital transformation project. From their accessibility to the flexibility of the platform, it’s hard to choose a better platform than Liferay. Contact us and find out how Veriday can design and implement your next technology solution.

 

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